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AGRICULTURAL ECONOMICS

CHAPTER I

AGRICULTURE, MANUFACTURING, COMMERCE

The Rank of Agriculture Among Our Industries. For many years of our history agriculture was the leading industry. Agriculture came first as to the amount of capital invested, first as to the value of the output, and first as to the number of persons employed. This economic primacy gave agriculture an important place in the early political life of the nation, many congressmen and even several early presidents being actual farmers. George Washington for instance was born and reared on the farm, died on the farm, and lies buried on the farm. In Washington's day wealth, intelligence, dignity, influence, all went with farming. This primacy of agriculture has been lost due to the economic evolution of our country and the development of its vast and various resources. At the outset, then, let us examine some of the evidences of this change in the rank of agriculture. The United States Census Report for 1900 describes the situation in these words:

"Down to 1880, or to some time between 1880 and 1890, agriculture was the principal source of wealth in the United States. At the last census (1890) the value of farm products was exceeded by that of manufactured products. At the census of 1900, the value of farm products is shown to have been $4,739,118,752. In this total there occur certain duplications which the Report on Agriculture eliminates, leaving a residue of $3,764,177,706 as the actual net value of all farm products in the census year. The net value of the products of manufactures, as computed in the census, is $8,370,595,176, a sum more than double the value of the net products of the farm. If from this net value is eliminated everything in the way of crude materials contributed by the farm, the forest, the mine, and the sea, there is still left a value of $5,981,454,234; and on this basis it appears that the contribution of manufactures and the mechanical arts to the wealth of the country exceeds the contribution of agriculture by more than a billion dollars. The figures indicate that rapid as has been the development of agricultural interests, manufactures have advanced even more rapidly.

"This conclusion is strengthened by a consideration of the statistics of occupations as presented at the several censuses. . . During the twenty years, 1880 to 1900, the number engaged in agricultural pursuits increased 34.6 per cent, while the number engaged in manufacturing increased 87.2 per cent."

The 1910 census compares the two thirty-year periods, 1850 to 1880 and 1880 to 1910. "During the first of these two periods,"

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NUMBER OF PERSONS ENGAGED

3

states the Census Report, "the agricultural industry, so far as can be measured by statistics as to the number of farms, farm land, and improved land, more than kept pace with the population." But it has failed to do so since. "The population increased 116.3 per cent between 1850 and 1880, while the number of farms increased 151.9 per cent; but from 1880 to 1910 the population increased 83.4 per cent, the number of farms only 58.7 per cent, and the improved farm land only 68 per cent."

It is true that the value of farm property showed a gain of one hundred per cent in the ten-year period from 1900 to 1910, increasing from some $20,000,000,000 to $40,000,000,000. Yet this gain of $20,000,000,000 is rather an illusory gain, since $15,000,000,000 of it represent merely an increase in land value and no added investment of capital whatever. This "unearned increase" in value therefore is a detriment rather than a benefit to the country at large, and is perhaps an evil to the farmers themselves. For it makes farms constantly higher in price to the would-be farmer and hence ownership more difficult to attain. It means more renters and more mortgages. For more and more it is becoming true that the farmers do not own the farms. The city investor or speculator or the "retired farmer" is becoming the farm owner, and is therefore getting the benefit of the $15,000,000,000 increases in farm land value. And the farmer who is a tenant is helping pay the penalty. The report of the Thirteenth Census tells us, "It may be noted that at least since 1880 (and probably further back also) the farms operated by tenants have in each decade increased faster than those operated by owners "(Fig. 1).

Number of Persons Engaged.-There has been a gradual increase in the number of persons engaged in agriculture, manufacturing, professional service, domestic and personal service, and in transportation. But the proportion engaged in agriculture quite naturally shows a gradual decline. In 1870, 48 per cent of the workers were in agriculture; in 1910, only 33 per cent. There are approximately six million farms in the United States, and allowing to each farm a family of five persons, we have thirty million of our population living in the open country. There remain therefore over seventy million who are living in cities and villages. The significance of these figures is important from the standpoint of an agrarian party or an agrarian policy in the United States. Any such a party with a policy of increasing agricultural profits at the expense of the consumer would be in a very hopeless minority.

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